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My mobile phone company charged me too much VAT…

A uSwitch investigation revealed that some of the major phone companies, including Orange, Three, T-Mobile and Virgin Media have charged customers too much VAT.

VAT went up from 17.5% to 20% from 4th January, but some companies backdated the increase so that it came into effect for the whole of the first bill their customers got after the rise.

I took a personal interest in this story, because I noticed earlier in the month that I’d been overcharged. As you can see on this copy of my bill, although the billing period was the month leading up to 8th January, I was charged 20% the whole time. In reality, only four days of that bill should actually have been charged at 20%.

The difference is only about £1, and it’s probably more hassle than it’s worth to claim it back, but it’s still annoying.

It’s baffling as well, because the phone companies won’t be profiting from this – the VAT will go straight to the taxman!

How do you feel about this? If you were affected, are you angry? Or are you not bothered because the amount so low?

  • Stuart Taylor

    I have just contacted orange, as mine was the same.

    They have advised me that in my case, my January’s bill goes from Jan 26-Feb 25th where the correct 20% VAT is being applied.

    Looking at December’s bill, which is December 26 – January 25th the old VAT rate of 17.5% has been applied.

    So in comparison orange have not charged customers more money, infact less money, as in my case the 20% VAT has not been applied until January 26th.

    • Lauren Pope

      You were a lot luckier than me then!

  • Jim Price

    VAT is properly levied at the date of invoicing/time os sale. Therefore someone whose bill was issued on Janaury 3rd would have been charged 17.5% for the whole month, whereas bills issued on January 4th and later were properly charged at 20%

  • Rob

    I’m surprised everyone’s so up in arms about this (not so much here, but I’ve seen some very angry comments on the subject elsewhere). Although I’m vehemently opposed to the Govt’s cuts and the VAT rise, as I see them as a sure-fire way to kill off growth in the economy, I do think that if most people are taxed a few extra pence or pounds, and that goes straight to the Government, it’s not a lose-lose as people seem to be suggesting. We can probably spare the 50p-£1, but added up that’s millions of pounds going to the taxman to pay for nurses or filling potholes or whatever.
    The Government believes it needs the money, and will make us pay one way or another. Whatever we pay in VAT this month goes towards the next budget, when they’ll decide how much to tax us elsewhere.

  • Gil

    I would like to know why Orange charge VAT for Broadband but won’t give you a VAT invoice/receipt. This is against the law!

  • Jim Price

    Invoices and receipts under a certain value (£100 ?) do not have to include VAT as a separate item, the words “including VAT” or prefereably “including VAT at 20 percent” are sufficient, nor do VAT receipts have to be given when the supplier knows that the customer is not VAT registered.


    Jim Price is right. Our accountant spoke to hmrc the 1st time vat changed. The advice was clear “the date of invoice creates the tax point”. I noticed on our most recent bill BT have charged vat at 2 rates – 17.5% for calls made before 4/1 and 20% for line rental etc that is paid in advance. Confusion reigns.

  • Caz

    What I would like to know is if we have signed for a phone contract for 18 months before the VAT rise, then aren’t the phone company’s breaking terms and conditions by putting our bills up? As we have signed a contract? Mine went from £45 a month to £50 a month now I think it’s wrong.

  • Jimmy

    Why should we be charged VAT? It’s ridiculous, surely the companies themselves should be paying taxes to the government not the consumer. I pay £45 a month for my mobile phone contract, surely they’re making enough profit to pay the government any taxes owed. I’m finding it hard to be proud to be British, who would be proud of a nation that hammers it’s people for tax on every single item?

    It’s about time we stood up to the government, they’re meant to be serving us not the other way round….